ASCI Scores Are Good News for Charter

Efforts to boost HD-channel capacity and improve customer service are apparently starting to bear fruit for Charter Communications, which rose two spots in the cable rankings in the most recent American Customer Satisfaction Index, placing a strong second to perennial cable ACSI leader Cox Communications.

Charter finished the year rated at 64 out of a possible 100, an 8% improvement over its 59 rating in 2012, when it finished at the bottom of the cable heap.

Cox finished the period up 3% to 65, still below the 67 score it netted in 2011, but an improvement over last year’s decline of 6%. Comcast had a more modest gain of 3%, rising from a 61 score to 63 in the period.

Time Warner Cable, which lost about 119,000 video subscribers in the first quarter, had the biggest decline, dropping 5% to a rating of 60 from 63 in the prior year.

Since CEO Tom Rutledge came on board in 2011, Charter has revamped its video and high-speed data packages, significantly beefed up its HD offerings and has launched an all-digital initiative to free up capacity for more products and services.


Analysts were encouraged by Charter’s move up in the rankings.

“I think it definitely matters,” said Pivotal Research Group principal and senior media and communications analyst Jeff Wlodarczak. He pointed to Charter’s brand difficulties after its 2009 bankruptcy filing and noted the MSO has spent considerable capital to improve customer service and resuscitate its brand.

“This is evidence that management is successful,” Wlodarczak said. “Improving the Charter brand, customer service and product boosts their ability to get more households to try the product. It is also is very important as Charter looks to gradually [wean] consumers off of triple play promotional pricing (beginning in the second half of 2013) and it should help as Charter management leverages what they believe is a better overall product to take back share from satellite TV players.”

ISI Group media analysts Vijay Jayant and David Joyce noted that Rutledge’s efforts are bearing fruit, with increased triple-play penetration (30.5% in Q1 vs. 28.9% in the prior year) and better video-subscriber trends “which are reflected in that customer-satisfaction survey improvement.”

Overall, the subscription-TV industry gained about 3%, ending a three-year run of stagnant customer satisfaction to finish the year with a rating of 68, according to ACSI. That rise was due mostly to improvements at telco video and satellite TV providers. Among TV service providers, those offering service via fiber-optics or satellite earned the highest points for customer satisfaction — on average, fiber-optic/satellite-TV service providers averaged a 72 score, versus 63 for cable providers.

FiOS led the telco group with a 73 rating, down 1% for the year, while DirecTV logged a 72 rating and AT&T’s U-verse service rated a 71. Dish Network gained 1% in the period to finish with a 70 rating.

“While nearly 90% of households have some form of TV subscription, the industry is facing small, but growing, competition from Internet video streaming,” ACSI director David VanAmburg said in a statement. “The industry’s pattern of yearly price increases, coupled with sporadic reliability, keeps customer satisfaction low relative to other household services and vulnerable to new technologies that enter the market.”

Subscription TV customers give picture quality strong ratings for both HD and basic resolution, but find call center service to be lacking compared with most other industries, according to the ACSI report.

ACSI began rating Internet-service providers for the first time this year, and ISPs debuted with a customersatisfaction benchmark of 65 — the lowest score among 43 ACSI industries.

“High monthly bills combined with problems across a broad spectrum of customer experience benchmarks — such as service reliability, data-transfer speed and video-streaming quality — leaves customers less than satisfied with their ISP service,” ACSI founder and chairman Claes Fornell said in a statement. “But in a market even less competitive than subscription TV, there is little incentive for companies to improve.”

Only Verizon Communications’ FiOS and the aggregate of all other smaller ISPs break out of the 60s with identical ACSI scores of 71. Cox beats the average at 68, followed by AT&T U-verse and Charter at 65. Rounding out the sector is CenturyLink at 64, Time Warner Cable at 63 and Comcast at 62.


The wireless industry reversed course in the period, ending a two-year stretch of declining customer satisfaction ratings, with a 2.9% gain to an ACSI benchmark of 72. But despite matching its 10-year high, wireless service remains well below the national ACSI average.

Verizon Wireless leads the larger carriers due to a 4% jump to 73, ahead of Sprint, which stalled at 71 in the period. AT&T Mobility gained 1% to 70, while T-Mobile dipped 1% to 68.

The ACSI uses data from interviews with about 70,000 customers annually, measuring satisfaction with more than 230 companies in 43 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.

The Index was founded at the University of Michigan’s Ross School of Business and is produced by ACSI LLC, which became a standalone company in 2009.


An 8% uptick in the American Customer Satisfaction Index is a sign that Charter’s moves to bolster customer service are paying off.